Property is something I’ve always been interested in and it’s something I’ve gotten from my mum for sure. I think investing in property is definitely on the cards for when we’ve gotten married. As I have readers both in the UK and the US predominantly, I thought I’d put together a handy guide to investing in a condo.
This is a collaborative post.
Know Your Budget
When investing in any type of property, it’s a good idea to look at the finances and see what you can reasonably afford. Condos are usually priced much lower than the average home and therefore are financially more doable for anyone who’s starting off in the property market. Look at any savings that you have currently in your bank account and what you may be able to loan or make during the time between searching for a property and then actually putting the money down for it. You have to also factor in that there may be other fees and legal costs that you need to pay towards the process and therefore having all this included in your budget will help.
Research The Area
There will be plenty of condos available depending on your area and something like Precondo is great for finding them on an interactive map. Condos tend to get a bad reputation for being bad investments but it’s not ideal to make such a sweeping statement that all of them are bad without doing the research and crunching the numbers. Some areas are going to be better than others so it’s worth doing a bit of background research into the locations you are looking at to see what the relevant rental value is or the rate at which these condos sell when on the market. Talking to local real estate agents and investors will help you learn a bit more about the market if it’s something you’re new to. If the area is a popular university town, for example, that would mean condos can end up being a cash cow in terms of the easy rental you’d get from it. At the same time though, you may have to pay out for cleaning costs and any damage done to properties that exceed any security deposits that are paid for by tenants.
Being A Landlord
Being a homeowner is certainly different than a landlord. As a landlord, you have a lot more responsibilities but you also have the opportunity to play around with the amount of money you charge. This can end up increasing your cash flow even more. As an example, if the condo is placed nearby a local transport or within easy distance of the local shops or important buildings, the demand for this nearby space is not going to be in short supply. Potential tenants will want to pay more, rather than paying less and having to live further away. So when it comes to finding condos to invest in, always think about the location that it’s in and how many benefits it has to being in that particular spot. It may also be worth thinking about the type of contracts you put in place for rentals. Long-term rentals will mean you don’t need to worry so much about having to spend time looking for tenants and any downtime in between tenancies. Short-term rentals are becoming more popular especially within student populated towns and cities. If you’re organised enough then the increased amount of cleaning that will be required shouldn’t take up too much of your time.
Keep Up With The Maintenance
Like any property, if it’s not given enough attention, then it’s going to get general wear and tear. More damage can develop if it’s ignored so regardless of what you use the property for, it’s good to keep up with the maintenance of a property on a seasonal basis. Pay attention to the structural integrity of the property, especially when it comes to the windows and doors. This is usually where problems can appear and you want to ensure that your condo is as insulated as it can be. If you don’t have the time then it is worth hiring a local handyman/gardener who can help with this occasional clean up when needed.
Investing in property is certainly worth doing if you have the funds to do so. It’s much better than having it sit in a bank account and collecting very little interest. If you are interested in investing your money, make sure that you start off by doing plenty of research. Work out your budget and then approach the professionals for advice on the first steps that you need to take. Building up a property portfolio is exciting and more importantly, it makes for a more comfortable life later on down the line.
Are you interested in investing? Let me know in the comments below.
*Disclaimer – This is a collaborative post. All words are my own.
